Lawsuit accuses Trump family of peddling phony get-rich schemes

A new lawsuit filed in federal court Monday accuses President Donald Trump and his children of convincing consumers to invest in get-rich-quick schemes, while also accepting “large, secret payments” from the companies they were pitching.

The complaint landed a week before a congressional midterm election that Trump has called a referendum on his presidency. It was filed on behalf of four unnamed plaintiffs by lawyers Roberta Kaplan and Andrew Celli, both donors to Democrat Hillary Clinton’s 2016 presidential campaign, and is being funded by Tesseract Research Center, a progressive group led by Morris Pearl, a former managing director of investment giant BlackRock.

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“This case is about four working-class Americans, and thousands more just like them, who were deliberately defrauded by Donald J. Trump, his family, and the corporation that bears their name," the legal filing states.

A spokesman for Kaplan confirmed Tesseract’s involvement but gave no additional comment.

The suit names Trump, Donald Trump Jr., Eric Trump, Ivanka Trump and the Trump Corporation as defendants. The White House did not immediately respond to a request for comment, nor did Alan Garten, a lawyer for the president's business.

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According to the lawsuit, which was first reported by the New York Times, the Trumps were paid to pitch prospective investors on behalf of three companies that they said would likely offer commercial success. "The Message was materially false. The Investments did not — and could not — offer a reasonable probability of success," the lawsuit states.

In one example, between 2005 and at least 2015, Trump claimed that an investment in a multi-level-marketing company called American Communications Network, or ACN, was “without any of the risks most entrepreneurs have to take” and that its flagship product was doing $500 million in annual sales, even though those claims were false, the lawsuit states.

At the same time Trump was endorsing ACN, he also secretly received “millions of dollars in secret payments” from the company in the form of speaking fees and appearances, according to the complaint. Trump featured prominently in the company’s magazine and blog and attended at least 14 events in the U.S. and overseas, the lawsuit states.

“Trump spent years cultivating a brand for himself based on the impression that he was a successful entrepreneur,” the suit claims. “Defendants conducted the affairs of their enterprise as a fraudulent scheme to leverage that brand, and use a series of false and misleading statements and omissions, to ensnare vulnerable consumers.”

Plaintiffs include the pseudonymous Jane Doe, a hospice caregiver from California who the lawsuit says invested in ACN after seeing clips of Trump praising the company on his reality television show. The complaint says she paid $499 to register with ACN and spent thousands of dollars to attend events and motivational rallies, but she earned a total of $38 after two years.

The other three plaintiffs saw no return from their investments, according to the complaint.

Trump and his companies have been accused of fraud in the past. In November 2016, he agreed to pay $25 million to settle lawsuits against Trump University.

The new case, Jane Doe v. The Trump Corp., was filed in U.S. District Court for the Southern District of New York.